It’s tempting to put off hardware purchases when you’re a small business owner. Cost is a factor, for one thing. And there’s the commitment factor. Small businesses can ill-afford to have precious capital tied up in hardware with a clock rapidly ticking toward obsolescence.

When to buy hardware can be a crippling decision. Is the next big thing only a week away? A month? What’s the right time to pull the trigger?

These are some of the problems solved by hardware as a service (HaaS). It fills a natural need in an obvious way, and replaces the one-time transaction—a hardware purchase—with a long-term relationship between client and vendor.

For companies that struggle to pay the cost of hardware upfront, HaaS can be a lifesaver.

Defining HaaS

The appearance of HaaS is the result of a variety of factors: Building hardware has become easier for manufacturers thanks to cheaper parts, simplified prototyping, and the opening of new channels for distribution. HaaS is attractive for buyers—they can pay for the use of their desired hardware, rather than the hardware itself.

HaaS packages typically include the hardware, of course, but also the compatible software, plus a standard maintenance plan—all for a monthly charge. Installation might be included as well under the terms of service. And because HaaS is structured like a service instead of a typical hardware sale, contracts may include a service-level agreement (SLA).

The world is seeing especially strong growth of HaaS in the retail, health care, and hospitality industries, among others—in part because small businesses are trying to move away from spending too much money on IT infrastructure.

The world we knew, where computer and server sales were the key indicators of technological adoption (and even the health of the economy as a whole), continues to disappear. A recent IDC study of the hardware trend predicts that on-premise infrastructure spending will decline at a 1.3% compound annual growth rate between now and the year 2020.

Earlier this year, the Gartner Worldwide IT Spending Forecast predicted a very modest rise in worldwide IT spending—just a 0.6% increase over 2015. But the same forecast shows spending on devices declining by 1.9%.

4 Ways Small Businesses Benefit from HaaS

1. Cost reduction

Reduced capital expenditure is one of the key drivers for HaaS adoption. With lower hardware costs, companies can dedicate more of their available capital for IT architecture and other important functions. With service included in the contract, there’s the additional benefit of cost certainty. It’s very much a what-you-see-is-what-you-get arrangement.

2. Utility service

Speaking of service, HaaS helps eliminate uncertainties around the maintenance and performance of the provided hardware. Equipment and services are both included in the service-level agreements signed between the provider and the client. There’s less pressure than ever on small businesses to achieve expert-level knowledge on the maintenance front.

3. Flexibility and scalability

“If one’s not enough, maybe two will do.” HaaS enables an enterprise to scale its service package up or down, depending on the changing needs of the business. Components can be added or subtracted as necessary—in contrast to the problems you’re likely to encounter when purchasing equipment outright.

4. Automation and updates

One of the driving factors for the adoption? You get the assurance of regular updates with the latest hardware solutions. And that means translates into promises of regular improvements in performance without you having to make additional capital investments.

Data Storage Needs Fuel the Growth of HaaS

The exponential growth of enterprise data is well documented. The digital revolution isn’t over—in fact, if we think of it in terms of the sheer amounts of data that’ll be produced in the coming years, that revolution has only just begun.

The total amount of digital data in the universe is said to be doubling every 2 years. Understandably, the exploding need for data storage applications and hardware is also expected to drive the growth of the HaaS market.

Enterprise network security is another area presenting challenges that HaaS can help with. Both hardware and software components often require regular upgrades and updates, creating headaches for small businesses. But with HaaS, all that work is taken care of for you.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those
of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.